American Views Abroad

 
The United States is one of the few countries that taxes its citizens irregardless of where they live and work. There is an exemption for foreign EARNED income. It's the word 'earned' one should not overlook here. The moment you are no longer 'earning' money, all income is taxed. For example, your pension or unemployment benefits will be considered taxable, irregardless of whatever might be in tax treaties between countries. The IRS has its own way of looking at things and they have little to no conception of what it means to be living abroad in, for example, high tax rate countries of the EU or for that matter, why any American would want to live outside the US. Should an American citizen decide to renounce his or her citizenship, it is usually taken for granted this move is being done to avoid taxation and thus they claim the right to demand taxes for up to ten years after this move. Ditto for anyone with a green card. Green card holders are supposed to pay US taxes whether or not they are residing in the US. As for the Alternative Minimum Tax, US citizens living abroad who are solidly middle class and not super rich by any means have been acquainted with this absurdity well before most US citizens residing at home knew it existed.

As usual the history behind all this shows just how short-sighted and ignorant of the world policy makers in Washington can be. Some time in the late fifties or early sixties, a few members of Congress became rather outraged that a few hardy US citizens roughing it out in the oil fields in the Middle East were not paying any income tax on their-- for that time -- rather high earnings. Never mind that those oil producing countries don't have any income tax, unlike the countries of Europe. Just throw all US citizens residing abroad for whatever reason into one boat. Become outraged that a few citizens are not paying taxes on income not at all earned in the US, but in jobs most likely beneficial to the US economy. Viola, taxation of US citizens abroad takes on a life of its own. Nor is there any attempt to correct past errors. Just the opposite. Now with budget deficits so high about once a year there are new attempts to raise our taxes.

Dollar's Retreat Raises Fear of Collapse at www.truthout.org/docs_2006/091407R.shtml:
'But the latest turmoil in mortgage markets has, in a single stroke, shaken faith in the resilience of American finance to a greater degree than even the bursting of the technology bubble in 2000 or the terror attacks of Sept. 11, 2001, analysts said. It has also raised the prospect of a recession in the wider economy.'
- posted by Gloria @ 11:10 AM